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The problem with this younger generation doing its downloads for free is that we dont know if, as they mature, they will become a $ spending portion f society on music albums. A much higher precentage of older people do it than younger, and what will we do when they die off? there is no evedence that people who mostly get their stolen-err, i mean free music off the internet wll ever go buy albums at the rate they listen to music. Is album costs jigher because it has to change f=hands from the maker, distributer, and retailer? they all need to make a profit off of it, so that doesnt mean its 'inflated', as internet music doesnt go through those stages

The previous generation was pirating music while we were still in diapers. The recording industry just wasn't in a position to track the activity and level multi-million-dollar lawsuits against offenders.
Your argument also assumes that we need people like distributors, marketers and retailers, but 5000+ years of musical history says we don't. In addition, I am absolutely positive that at at least one of those points in the distribution chain, people handling the albums are charging more than supply and operating costs, and that is indeed inflation. Take a look at this explanation of recording costs (by the RIAA) and tell me that every step mentioned in that process is necessary to producting and disemenating good music. Then take a look at studio costs quoted by actual bands. There is an enormous disparity. Also consider the fact that much of the recording and editing can now be done on home computers, for a one-time setup cost of about $12000 at most. See here (can't believe I'm referencing USA Today, shudder.)
When a business begins lying to me in order to justify taking excessive amounts of my money, that's about when I lose interest in patronizing them. And my disenchantment extends to the bands that sign on to these labels, because they're the ones who have given the RIAA the power to do this.
~Joe

PS - Er, that second link isn't quite what I was looking for, let me dig around a bit more... Also, there's a fairly apt analysis of losses associated with recent developments in music piracy here.

How do you know it isnt? for very few of the 5000 years of music has it been able to be recorded and distrubuted en mass, so your argument means moot. If all those go into making a CD, how are we to say how much it should cost?

I'm not trying to say how much a CD should cost, although I am looking to see how much a CD actually does cost. The point I'm trying to make is that music did fine without record labels, agents and retailers - all of those jobs are just elaborations, and they don't seem to do anything but raise the cost of listening to music.
~Joe

Actually, this is a little odd, but Copying/ burning CD's, there’s a parallel in the plant industry to that. If you can propagate certain cultivars, you are free to do so and distribute them, no strings attached. Only recently has there been a move to copy write cultivars. What makes propagating someone else’s cultivar and someone else’s song so different, anyway?

Back on topic, if they are so uneeded, why havnt they been done away with? in industry there is a strong force to shed uneeded services.

Take a look at the rates of these studios that I found on Google:Bob Jones UniversityIndian Trail Recording StudioSound Path Recording & Production
Basic recording costs run about $4000-$7000, for a generous 80-hour recording session. (My understanding is that the typical album takes about 40.) Give another 30 hours for mixing and the price goes up by about $1500, although many studios offer package deals that include free time mixing when you pay for recording. A master DAT or glass CD costs $500 tops. Total production cost for an album that takes way longer than it should, then, is probably at most $9000. You can buy 10,000 pressings for about $3200, for an overall cost of $12,200/10,000 = $1.22 per disc. Graphic design for a cover would cost about $500 from a design firm or independent artist, and the inserts for 10,000 discs could probably be printed for less than $1000 (here I'm guessing on the printing cost, but it seems pretty lavish.) So that's an additional 15˘ per disc, for a total of $1.37. If you have a five-person band and one audio tech, and you pay them all at the generous rate of $15 an hour (that's a lot for the average musician but probably not as much for the mixer,) then the personnel cost is $6,450, about 65˘ per disc. So, if you had nothing to do with the band or studio and just wanted to have a batch of 10,000 CDs made according to your specifications, it would run a little less than $20,200, or $2.02 per disc, at most. This is a higher cost than normal, because typically the band isn't paid for their studio time - their pay comes from profits on album sales. This estimate is a very liberal one; many recording studios include the mixing and mastering with the recording session, and many CD printers include the labels with batch orders. (A low-end estimate would then be $7,700 for 10,000 discs, 77˘ a disc.) Also consider that as units go up beyond our 10,000 disc mark, production costs become exponentially smaller. The overall cost is even more negligible for record labels, because they already are affiliated with studios and manufacturers (or they own such facilities outright) so all they really pay is operating costs.
~Joe

PS - They haven't been eliminated because they have enough money to make a niche for themselves. The notion that economic systems shed unnecessary features is an outdated concept which has been shown faulty again and again. Just look at the QWERTY keyboard.

Ok seedjar you win, at this point, even if I found something to disagree with, I don’t know enough about the music industry to formulate a effective reply to your last post. However, about the QWERTY, there is actually the point that because the costs incurred by using the supposedly inefficient layout are much less than those of retraining typists to use other types, so the retaining of QWERTY is actually a result of not wanting to go through the unnecessary costs of retraining a typist. Thus QWERTY is superior all related aspects in the cost/benefit ratio for individuals changing to the new standard, but not the LOGICAL one. That the QWERTY is unnecessary is a logical assumption, but economically this proves not to be true. Changing it would involve several steps performed in sequence which would produce less efficient systems in the interim, thus making the cost prohibitive.